Previously, the minimum capital requirement for starting a digital bank was TK125. In contrast, traditional banks need TK500 crore for a license.
Bangladesh Bank has raised the minimum capital requirement for digital banks to TK300 crore, as stated in a circular on August 24.
Under guidelines established on June 14, 2023, the initial capital for digital banks was set at TK125. For traditional banks, the requirement remains TK500 crore.
Digital Bank Licenses are granted under the Banking Corporations Act of 1991, with payment services functioning according to Bangladesh’s Payment and Settlement System Regulations from 2014.
Digital banks are required to pursue an initial public offering (IPO) within five years of receiving their license. The IPO must at least match the initial contribution of the sponsors.
This shift toward digital banking aligns with a global trend where online services are taking precedence over traditional brick-and-mortar banks.
Unlike traditional banks, which have physical locations throughout the country, digital banks operate with just a headquarters.
The existing guidelines for business, governance, and operations that apply to traditional banks will also apply to digital banks.
The central bank aims to launch digital banks in Bangladesh, following a global movement away from conventional banking.
Notably, South Asian neighbors India and Pakistan introduced digital banks in 2022.
Currently, Bangladesh has a crowded banking sector with 61 traditional banks.
